Looking ahead: what changes will technology bring to retail environments in 2019?

From the introduction of self-service grocers in the early 20th century to self-service tills in the 90s, retail and innovation go hand-in-hand.

So unsurprisingly, a large percentage of our in-store predictions for the upcoming year will be driven by the technology sector via areas like mobile and AI (Artificial Intelligence).

This was further outlined in John Lewis’s How We Shop and Look 18 report. Although retailer brand identity and events would become more important, it highlighted the role tech would play in the future.

A thing of the past?

Mobile wallets will continue to replace cash and cards

Time to put away that crusty wallet and overloaded purse - mobile payments will make a big leap towards becoming the norm in 2019.

So far mobile wallets have been taking their time to hit the UK mainstream. To illustrate this, in 2017 MasterCard found that only 1% of retail transactions were made via a mobile.

But the signs are it will take hold, especially with the continuing evolution of wearables. On top of this, expect a convergence of loyalty schemes and mobile payments.

The growth will be driven by the already-serious investment technology brands like Apple and Google. While the likes of Visa, MasterCard and PayPal have all spent in a desperate bid to get an edge.

Products like Google Beacon have launched in the US with retailers like Macy's trialling the system. The UK is taking longer but there is huge potential for the technology, in terms of delivering offers, personalising the consumers shopping experience, and providing a proximity-based experience.

Speaking about the importance of mobile, John Lewis trading director Simon Coble said: “How we shop is changing at an incredible speed and shops need to combine the very best in service and experiences with unique and fantastic products.

“And the mobile phone is vital in both as a means to browse and research but also as a place to buy.”

Artificial Intelligence and Machine Learning

Artificial Intelligence (AI) and machine learning is everywhere right now. Unsurprisingly, retailers are also looking at it as a way to utilise their customer data. In a lot of cases, this will be used on the back-end of the store to help with design and layout.

One area of innovation is the use of AI to reconfigure stores using heat maps and lidar sensors.

Lidar works like radar but with light instead of sound. It can be used to analyse “heat maps” based on where customers walk and which promotions they look at.

This data can be used to build predictive models to determine the best places to display specific products and offers.

Amazon Go

Automation is coming

Automation has been with us in the form of self-service. But this year, Amazon introduced Go in US. This allows consumers to log in to their Amazon accounts via mobile and walk out with the products.

According to reports, Amazon has been inundated with requests from retailers for more information on the system. There are also reports Amazon is set to launch Go in London.

Potentially, a store without checkouts could become the biggest change to retail since the self-service till. But it is unlikely to be copied everywhere.

For example, the system requires each product to have a digital tag. For supermarkets with low-cost FMCG items this is not going to work. But in smaller stores with higher-end products it is easy to see the potential and benefit and attraction.

OPI augmented reality nail lacquer kiosk

Changing reality and in-store experience

Stores are not places to buy and sell products. They are marketing platforms in their own right. And digital technology, which is already being trialled, will play a major role in its growing sophistication.

Augmented Reality (AR) - enabling virtual items to be displayed in the real world - is one area that is being trialled. One example of this, cosmetics brands are creating special mirrors that will allow consumers to see what they look like with a specific type of makeup on them.

It is easy to see how this will prove a hit and a strong draw with consumers. As it does, Virtual Reality (VR), will also become more prevalent. A number of retailers are using VR booths to better educate consumers about products.

VR technology offers the opportunity for retailers to cut back on the size of their retail outlets, potentially saving them money.

Some have even gone further than products. Topshop launched a VR experience in its flagship London store allowing consumers to ride a virtual water slide through Oxford Street.

Brands will use technology like this to create an experience to pull people into the store and even, like in the Top Shop example, build the brand.

Iconeme beacon app

Conclusion

Technology will always be a driver of retail innovation. Retailers will continue to head off the online threat from online by shifting towards experiences and linking in with events.

Looking even further ahead John Lewis futurologist John Vary said the shift to wearable tech will accelerate shopping habit change. While innovations like driverless cars may remove the need for car parks and allow stores to use space in other ways.

E-commerce continues to be a threat in 2018. But retail will counter this by evolving - like it always has - and using technology to make the store more efficient, fun, and easy to shop in.